Choosing Colors

Double click on the top color outlined in red:

Click on the right bar to choose color first:

Click in the left box to choose brightness or darkness:

Making a New Layer

Ctrl-L for the Layers Window, then click this icon:

Click on the top layer so you can draw on top of the image:

Saving Your File the First Time!

Click File -> Save As:

Click "Select File Type" and choose "Photoshop Image." Make sure the Name now ends with ".psd" like the screen below.